A recent analysis by Kaufman Hall, a Vizient company, revealed that 46 hospital and health system transactions were announced in 2025, marking a decrease from the previous year. However, merger and acquisition activity has already begun to pick up in the new year, with 17 transactions announced in the fourth quarter alone.
getty
The landscape of hospital and health system mergers and acquisitions concluded 2025 with momentum that is expected to carry forward into this year. This surge in activity is driven by looming cuts to Medicaid spending under President Trump’s One Big Beautiful Bill Act.
A recent analysis by Kaufman Hall reported that while 2025 started slow due to policy and market uncertainties, the year ended with a resurgence in merger and acquisition activities. Anu Singh, Managing Director at Kaufman Hall, highlighted that significant deals outside of hospital transactions, such as acquisitions in ambulatory care, lab services, and behavioral health providers, were observed in 2025 and are expected to continue in 2026.
As the financial distress on healthcare providers intensifies, fueled by anticipated cuts from the One Big Beautiful Bill Act, more hospitals and health systems are seeking mergers and acquisitions to navigate the changing landscape. In Chicago, discussions are underway for hospital mergers, with Prime Healthcare recently announcing its acquisition of Franciscan Health and an affiliated physician group in Olympia Fields.
According to Kaufman Hall’s report, the percentage of financially distressed parties involved in merger transactions reached a record high of 43.5% in 2025. This trend is expected to persist into 2026, as highlighted in the National Hospital Flash Report, which indicated a decline in hospital financial and operational performance in November.
“While month-to-month hospital performance softened in November, on a year-to-date basis, revenue and margins remain strong compared to previous years,” noted Erik Swanson, Managing Director and Data and Analytics Group Leader at Kaufman Hall. “However, the rise in expenses necessitates careful management, especially as patient volumes fluctuate, presenting an ongoing challenge for hospital leaders.”
